Indian Council of World Affairs

Abstract : The economic nodes of the Middle East, South Asia, and Europe pose significant trade and commerce potential should the IMEC corridor infrastructural project materialize. Given that member countries, such as India, Israel, and countries from the Middle East including United Arab Emirates and Saudi Arabia, among other participants, are expressing interest in bolstering their economies together, the geography along which they lie and politics notwithstanding offer an excellent opportunity for this growth. However, even though economic corridor ventures typically come with improved trade due to increased connectivity of regions, establishing industrial clusters and erecting solid transportation infrastructure often face inevitable challenges such as economic, logistic and security challenges, leading to delayed realization of the global value chain. Therefore, this paper explores the impact of IMEC, focusing on the geopolitical disposition of India, the Middle East, and Israel in an attempt to establish the importance of this economic corridor and the potential challenges it faces. 

Introduction 

The 9th of September 2023 hallmarked a turning point in the continental geopolitical arena when India, United States of America, and countries from the Middle East, including United Arab Emirates and Saudi Arabia, among other nations, signed an auxiliary Memorandum of Understanding dubbed the India-Middle East-Europe Economic Corridor (IMEC), during the G20 Leaders’ Summit convened in New Delhi. This development followed a series of deliberations and debates that preceded trade, commerce, political, and security discourses geared toward enhancing the economic state of the East and Northern corridors, connecting the India-Arabian Gulf and the Arabian Gulf-Europe. The IMEC corridor, mimicking the ancient times of ordinary connectivity and historic trade links between Eurasia, the Indian subcontinent, and the Middle East, seeks to overcome distance hurdles in favor of shared geo-economic interests through the construction of a substantial infrastructural corridor. While the corridor presents significant opportunities, including regional stability, peace, technological innovation, economic dividends, and cultural and political exchange for member countries and the broader Middle East and Asian region, IMEC faces substantial challenges, such as regional competition from other corridors, tension, and logistical hurdles. 

The Geopolitical Landscape of IMEC’s Member Countries 

The political and geographical characteristics of IMEC member countries depict national interests anchored in the countries, location, terrain, and resources. Each country seeks to build stronger ties with a wide range of members within the region and along the corridor and leverage positive relationships for the benefit of this cooperation. For instance, India has increased its geopolitical visibility regionally and internationally, with US-India trade and security, among other foreign ties, growing stronger each day. India, situated in proximity to a prominent international trade conduit, the Indian Ocean, is actively shifting to new pragmatic movement and demonstrating major geopolitical repositioning in collaboration with middle-power countries, such countries in Global South and world superpowers, including the United States of America. Similarly, Israel’s geopolitical strategy is pegged on tactical partnerships, territorial rows, and international alliances spanning intelligence, political, and military spheres (Qian 2023).Meanwhile, the Middle East’s location geographically positions it strategically between Asia and Europe, boasting the more extensive Arabian Gulf feature, renowned for massive global maritime trade routesand that met with the visions of the countries there (UAE 2050 and Saudi Arabia 2030)(Chen et al, 2023). In this light, the geopolitical landscape of IMEC member states is not only crucial in shaping international relations across the proposed economic corridor but also underlies the primary goal of redefining trade in the region. 

Opportunities of the IMEC Corridor 

Regional Stability and peace 

The IMEC coalition aligns with the European Nations’ Global Gateway program, serving as a robust ally in achieving its goals of strengthening diplomatic bonds, reinforcing infrastructure investment, and promoting sustainable growth. The corridor can significantly foster normalization and diplomatic associations between Middle Eastern countries, particularly the Arab states and Israel (Siddiqa, 2023). This assertion is particularly true when assessed from the perspective that the IMEC’s rationale largely stemmed from geo-economics and geopolitical considerations. According to (Suri et al, 2024), the suggestion took shape in the 2020 Abraham Accords and the 12U2 groupings that included India in the United States-Israel-United Arab Emirates huddle in October 2021. In July 2022, 12U2’s first virtual summit indicated strategic transport links among the leading focus areas. For the project to succeed, the coalition needed Saudi Arabia, which entered the scene around the same time the United States-led mandates to steer a potential development of diplomatic relations between Tel Aviv and Riyadh gained traction. The diplomatic ties would bring some peace to the region. 

These factors were ongoing when the National Security Advisors of India, Saudi Arabia, the United Arab Emirates, and the United States met in May 2023 in Riyadh. Among the early and enthusiastic project supporters was Israel, with a former Israeli Minister describing the transport association as a “peace train” that would promote regional peace and prosperity (Suri et al.).Nevertheless, much of the hope stemmed from the presupposition that the conflict resolution witnessed among the primary West Asia nations would persist, or, at the very least, the countries could handle their alterations more efficiently. The positivity was also evident in the normalization of Turkey relations with Saudi Arabia and the United Arab Emirates, the restoration of diplomatic ties between Saudi Arabia and Iran, and the thriving associations between the UAE and Israel. As such, the IMEC catalyzes stability and peaceful relations in a historically volatile region. 

Stabilized trade corridor 

A stabilized trade corridor—exemplified by the constancy of member states—streamlines trade route operations. An excellent case in point is the United Arab Emirates and Saudi Arabia’s established logistical centers, road networks, and seaports, which are crucial to the corridor’s success (Siddiqa, 2023). Besides, the European countries and India have stable financial markets from internal trade and relations with neighboring nations. Thus, this stability drives continuous and dependable transportation of products, renewable energy, and information, which is crucial for economic development. 

Increase in demand and supply between The Members 

The increase in demand and supply of trade commodities across the larger IMEC region presents a solid opportunity for member states to earn the benefits of this corridor. Primarily, the IMEC corridor will reduce the transaction cost of doing business between India and Israel through various country points, including the United Arab Emirates and Saudi Arabia, create job opportunities, and rationalize the construction of industries. This massive infrastructural project will create trade facilities, foster industrial and infrastructural development, advance tourism, and moderate commodity prices (Siddiqa, 2023). The countries along this corridor are bound to benefit significantly, with Israel, India, and the Middle East leveraging improved logistical services to access the European market. At the same time, IMEC will secure the supply chain by increasing operational efficiency and trade accessibility through the Haifa port (Sabha, 2024). 

Culture and Political Exchange 

Knowledge of foreign cultures and understanding the political interests of other nations is critical in bolstering international relationships. In this regard, IMEC presents an essential platform for India, Israel, and the Middle East to share and exchange cultural and political objectives underpinning their interests. Through the IMEC project, the region can reduce violence, foster tolerance, and affirm mutual economic interests amidst ideological, cultural, political, and religious differences (Fazli, 2024). The political exchange benefits will demystify myths and facts surrounding members perceived as better countries in political matters than others to create a fluid ideology that does not disparage other countries in this region. Conversely, the IMEC corridor is critical for cultural purposes as it will create tourism opportunities, enhance cultural integration, and provide educational and research opportunities. Cross-cultural exchange will decode cultural misconceptions and develop an understanding and appreciation of diversity, thereby bridging cooperation between India, Israel, the Middle East, and other member countries. Therefore, the IMEC corridor will integrate the Middle East, Asia, and Europe and facilitate extraordinary economic transformation between the Middle East and Europe. 

Positive Impact on energy, hydrogen pipelines and technology sector 

As an economic corridor, the IMEC parameters exceed the limitations of solely trading in goods and extend to energy, hydrogen pipelines, and technology. The corridor’s first forward-looking initiative is the incorporation of electricity grids in the IMEC paradigm, which is massively significant from an Indian perspective. India has already advocated mainly for the “One Sun, One World, One Grid” initiative as part of its International Solar Alliance’s leadership (Kadam et al, 2023). This inspired effort seeks to transmit renewable energy across regions to connect the world’s crucial grids into a shared green grid. Moreover, the plan is to include clean hydrogen pipelines in the corridor. There is robust and massive evidence that clean hydrogen will be the most efficient, long-lasting substitute for fossil fuels. To this end, the Indian government has directed $2.5 billion toward fostering the nation’s emergence as a green hydrogen hub (Suri et al, 2024). Multiple Indian business moguls and lucrative enterprises such as ReNew Energy Global, Larsen and Toubro Limited, the Adani Group, and Reliance Industries have expressed multi-billion-dollar funding initiatives to establish individual hydrogen projects. Corridor members like United Arab Emirates and Saudi Arabia have also announced similar investments. 

IMEC has also traversed the technological world, including energy and hydrogen pipelines. Given the burgeoning imperative for cyber security, the corridor proposed a secure, high-speed data pipeline that could drive the spread of India’s information technology services to West Africa and Europe. The multiple terrestrial cables and high-capacity networks are necessary to connect more people online and expand the region’s internet bandwidth. Completion of the digital connectivity in the corridor ensures secure information sharing and high speed, which is vital for regional integration and economic development. Given that technological innovation is the mainstay of economies in any region, India, the Middle East, and Israel, among other IMEC partners, will leverage their technological prowess to establish a solid economic front in this region. 

Challenges of the IMEC Corridor 

Israel Palestine conflict 

Despite its massive advantages, the IMEC has undergone significant challenges since its inception. Its viability has become controversial, mainly because of the turmoil in Israel through which the corridor passes. The Gulf unrest has substantially impacted ship passages through the Red Sea (Toraman, 2023). For instance, local consumers and producers who disagree with Israeli doctrines, especially its policies in Palestine, could boycott the IMEC and may be unwilling to use the trade corridor. This reluctance may be aggravated if the ship-to-trail transit corridors employ Israeli ports as hubs (Monroe). The recent eruption of violence and war activities between Israel and Hamas is a gloomy reminder of the persistent political difficulties of incorporating Israel in trade efforts. The ongoing turmoil in the Gulf, courtesy of the Israel-Palestine conflict, has prompted the consideration of alternative passage routes. Commercial ships passing through the Red Sea have redirected their routes to Cape Town, leading to extended transportation periods (Toraman, 2023). Additionally, this situation jeopardizes Israel’s IMEC membership and participation in the trading project. These problems shine a light on the India-Iran-Türkiye-Europe Economic Corridor (IITEC) because Turkey is increasingly becoming the most appropriate route between India and Europe. Such unrest compromises Israel’s position in IMEC and jeopardizes the corridor’s trade activities, limiting the achievement of its goals given Israel’s vital part in the system. 

BRI competition 

The establishment and launch of the IMEC corridor existed a decade after a significant and comparable outfit, China's Belt and Road Initiative (BRI), was established, indicating the significant regional competition the former is bound to experience. IMEC and BRI member countries pose competing interests grounded on the Middle East, Asia, and Europe geopolitics (Fazli, 2024).IMEC will have to contend with BRI on a geographical, sociopolitical, and economic ground despite the former focusing more on the Middle East and Central Asia, as the latter concentrates on East Asia and Eastern Europe. Therefore, regional competition from other corridors, such as BRI, challenges IMEC's operational strategy and political and economic interests. Beside that IMEC countries especially in the Middle East are going to face some pressure from China Regarding the implementation and the operational capability of IMEC project in way it’s not going to effect the BRI project. 

Logistic and financial challenges 

The IMEC infrastructural project is indisputably massive, and as a result, it encompasses multiple logistical and financial challenges. Logistic corridors should be cost-effective yet functional, efficient, tailored to freight needs, and fiscally sound (Calabrese, 2024). The prospect of multiple national custom checks as well as multimodal shipment conveyance could surge, thereby counteracting the economic dividends of this project. In this regard, the course to create a global logistics hub that solidifies the Gulf's position in international trading across Europe, Asia, and the Middle East questions the workability and the realistic nature of the member countries’ expectations. Therefore, the ambitious IMEC corridor, albeit perceived as an economic train and strategic endeavor that will reshape the geopolitics of India, Israel, and the Middle East, among other member countries, is subject to multiple regional, political, and diplomatic hurdles, delaying its progress. 

Competition with other corridors and country interest (Egypt, Turkey) 

The IMEC affords other regional non-member countries advantages to their economic operations, such as the Chinese corporations in the strategically crucial areas, opening possibilities for participation in energy, technical, and logistical initiatives with countries whose interests align with IMEC adoption, such as Turkey and Egypt. However, some of these nations might view the corridor as threatening their economic interest and strategic positions. For instance, some Egyptian entities have voiced concerns that the IMEC’s functioning may adversely impact operations at the Suez Canal, a critical marine route that oversees 10-13% of worldwide maritime commerce (Siddiqa, 2023). Notably, the IMEC and BRI operate within a setting that incorporates prior attempts at providing frameworks, such as the “Build Better World” (B3W) initiative, later renamed “Partnership for Global Infrastructure and Investment” (PGII). Additionally, opposition from the Turkish government due to their exclusion from the corridor has been massive. The Turkish President claimed, “We say that there is no corridor without Turkey… Turkey is an important production and trade base. The most convenient line for traffic from east to west has to pass through Turkey” (Aran & Kutlay). As a result, the government pushed the Iraq Development Road Project, which sought to link the Gulf region and Turkey with ports, highways, and railways passing through UAE, Iraq and UAE. These concerns hallmark potential global repercussions. 

Different Standards between IMEC Members 

Differences in regulatory standards, like the EU’s strict norms and regulations on emissions, unseen in India could cause operational difficulties in the corridor. The European Union has strict measures for pollution and has enacted regulations to reduce the carbon dioxide emissions from cars and vans. In 2009, the EU introduced carbon dioxide limits for fleet cars to reduce the emission of greenhouse gases from the transportation industry (Haas & Sander, 2020). Such initiatives align with IMEC’s goal of transporting hydrogen pipelines for renewable energy and reducing the use of fossil fuels. However, the case is different for other nations like India. The country has not been stringent about its emissions regulations and has only recently started enacting regulations to standardize them. To this end, projections show that India might delay hitting the emissions peak, attaining this feat between 2040 and 2045 instead of 2030. These differences might cause logistical and operational friction in the corridor. Therefore, coordinating these standards is necessary for smooth corridor functioning. 

Tensions between IMEC countries 

Following the emerging security developments between countries from Asia and the Middle East, regional tensions are becoming a challenge that impacts ordinary internal relations aspects and threatens IMEC's success. For instance, the relationship between Israel and Jordan is tense on Gaza Issue and the delay of the railway project as part of IMEC project between them, which has already spilled to IMEC and obstructed member countries from convening meetings that would propel IMEC's action plan (Alhasan and Solanki, 2023). The regional tensions have become unpredictable, impeding even the mini-lateral conferences encompassing the UAE, Israel, and India. Since political and economic links depend on the goodwill of partner members and the ability to create and foster trust, regional tension in the larger Middle East and Asia remains an obstacle bound to derail the realization of one of the world’s spectacular geo-economic architectures. 
 
Conclusion 

The IMEC is an ambitious plan that connects India, the Gulf, and Europe in an unprecedented trade of goods, hydrogen pipelines, data, and renewable energy. This initiative bears massive advantages to the member states and even regional non-participating countries. The countries experience intensified digital connectivity, economic diversification, and financial growth from the dividends. However, issues like the Israel-Palestine conflicts pose considerable challenges to the corridor’s viability and sustainability. Therefore, addressing the logical, financial, and geopolitical constraints which may delay the project is essential to IMEC’s continued prosperity.

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*Mr. Abdullah Musabbeh Al Darmaki, Political Researcher, Emirates Center for Strategic Studies and Research (ECSSR), Abu Dhabi, UAE was a Resident Scholar at the Indian Council of World Affairs (ICWA) from 22 April 2024 to 31 May 2024 during which he researched and held consultations on this paper.

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